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In Japan and across the business world, where Nissan chairman and Renault CEO Carlos Ghosn, was quasi-revered for reviving two of the world's most well-known car manufacturers, news of his arrest on Monday sent shockwaves.

Euronews recaps everything you need to know.

What is Ghosn accused of?

Tokyo prosecutors confirmed in a statement on Tuesday that they had arrested Ghosn the previous day over allegations of financial misconduct.

They said Ghosn had reported income of 4.9 billion yen (€38 million) over a five-year period when his actual income was closer to 10 billion yen.

Nissan CEO Hiroto Saikawa also told reporters on Monday that Ghosn had misappropriated corporate assets and money for his own personal use. For instance, Ghosn reportedly made private trips to several luxury properties owned by the Japanese company.

"Too much authority was given to one person in terms of governance," Saikawa told reporters.

"I have to say this is the dark side of the Ghosn era which lasted for a long time," he added.

What does it mean in Japan?

Nissan's executives will convene for a board meeting on Thursday to approve Ghosn's dismissal.

Mitsubishi — which is partly owned by Nissan and where Ghosn also has a chairman position — is expected to do the same, although a date has yet to be confirmed.

In the Nissan headquarters in Yokohama, the atmosphere is sombre. The scandal comes at a most inopportune time as the company is still reeling from its admission, in July, that it had falsified emissions tests.

What about Renault?

The third pillar of the Alliance is Renault, which owns 43% of Nissan. The news of Ghosn's arrest had an immediate impact with shares of the group tumbling more than 8% on Monday.

The board will gather in an emergency meeting on Tuesday evening.

The French state, which owns 15% of the group, sought to reassure the markets and employees on Tuesday.

"Do not worry, we are dealing with the matter," French Economy Minister Bruno Le Maire said in a tweet.

"We're asking for an interim governance and we're making all the necessary contacts to ensure the continuity of the alliance," he added.